Highlights
The FHFA house price index did come in at a lower-than-expected 0.3 percent gain in December but readings are nevertheless pointing to strength. Year-on-year appreciation is at 6.5 percent with November's rate revised 2 tenths higher to 6.7 percent.

In slight contrast to the regional breakdown in the Case-Shiller report, the West is showing less exceptional strength in FHFA's data. The Mountain and Pacific regions are out front, at respective year-on-year gains of 9.0 and 8.6 percent, but the South Atlantic is very solid at 6.7 percent followed by the West South Central at 6.6 percent. Bringing up the rear but not by much is the West North Central at a still solid gain of 4.6 percent.

Home prices proved to be one of the major features of the 2017 economy and the outlook for 2018 is little different.

Consensus Outlook
The FHFA house price index, like Case-Shiller, has been showing solid strength. Forecasters see the index rising 0.5 percent in December.

Definition
The Federal Housing Finance Agency (FHFA) House Price Index (HPI) covers single-family housing, using data provided by Fannie Mae and Freddie Mac. The House Price Index is derived from transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac. In contrast to other house price indexes, the sample is limited by the ceiling amount for conforming loans purchased by these government-sponsored enterprises (GSE). Mortgages insured by the FHA, VA, or other federal entities are excluded because they are not "conventional" loans. The FHFA House Price Index is a repeat transactions measure. It compares prices or appraised values for similar houses.
Why Investors Care

The FHFA House Price Index captures price data for an important segment of the housing market - home purchases with mortgages financed or bundled by federal housing agencies. However, this HPI does not cover high end housing.Data Source: Haver Analytics